Tal Liani

Robbins attributed the optics to comparison and telco acceleration, insisting hyperscaler demand is unchanged; asked by Thomas Zilberman on for Tal Liani.

Mark acknowledged modest pull-ahead, cited 3 supporting data points: 4-5pp of acceleration from price increases, no incremental pipeline pull-forward from Q4, and healthy Q4 pipeline with no degradation.

Patterson highlighted strength across entire networking portfolio with data center switching double-digit 6 of last 8 quarters and campus platforms ramping faster than historical launches.

Patterson noted Q3 is tracking normal seasonality despite huge Q2. Robbins added hyperscaler order lumpiness creates uncertainty in historical seasonal patterns.

Robbins shared that ex-hyperscale, rest of business grew 9% on orders. Patterson noted second-half comps are much tougher (Q3/Q4 FY25 were +11% and +8%).

Patterson explained services revenue decline reflects lapping of post-backlog professional services. Services typically trails product growth, expects improvement as networking revenue ramps.

Robbins acknowledged visible CapEx growth of ~50% aggregate but sees continued demand signals from customers, believes AI spending is durable.

Robbins cited global sovereign cloud strategies and said he does not believe 2025 is peak. Herren added that enterprise AI inference is a significantly larger opportunity than training.

Herren explained calendar mismatch (Splunk's Q4 week 13 fell outside Cisco's Q2), confirmed Splunk still growing double digits and profitable ahead of plan.

Robbins noted four consecutive quarters of organic security demand growth, highlighted 1,000+ customers for Secure Access and XDR with ~1M users each, Hypershield Fortune 100 wins.

Chuck gave detailed breakdown: 4 of 6 largest webscale customers above triple-digit growth, AI orders >$300M, participation spans silicon, systems, and optics across back-end and front-end.

Scott attributed to Splunk mix, productivity improvements, and one-time duty drawback catch-up. Guided 68%-69% for full year, indicating sustainability ex the one-time benefit.

Gary attributed the backlog build to lead times, not double-ordering; said revenue would be higher with more supply and the constraint persists into 2028.

Gary said about 50% of business is now direct hyperscalers, with growing 'neo scaler' demand expected to become increasingly important through 2027-2028.

Gary emphasized installation services growth (+42%) as proof of real deployment, not phantom orders. Deep collaborative relationships provide visibility into actual deployment timelines. Mark added value exchange includes non-cancelable terms to protect against backlog cancellation.

Mark confirmed locking in current component pricing through purchase commitments. Acknowledged future repricing risk and actively having conversations on both supplier and customer sides to avoid margin squeeze. Results and guidance raise reflect confidence in balance.

Mark pointed to $7.8B in FY2025 orders and sold-out Q1 as evidence of visibility. Gary attributed the acceleration to cloud providers' realization that networks became the gating item for AI infrastructure.

Mark expects more sustainable margin improvement than past cycles due to space/power value proposition. Mid-40s gross margin now viewed as waypoint, not endgame. Expects multiyear gross margin expansion with sequential improvement through FY2026.

Jim recommended using optical business growth as proxy for services growth, noting quarterly variations are noise around that trend.

Scott provided detailed roadmap: long-haul/subsea core today, metro DCI pluggables growing, campus 2-20km coherent in 2026, inside data center beyond 3-year guide.

Jim acknowledged plug margins are below average today but will improve with WL6 Nano and volume ramp. Gary added line systems carry the biggest weight in margin mix, not plugs.

Gary conceded service provider spend won't return to peak levels but expects recovery from two years of under-investment. Mofen and multi-cloud builds provide incremental growth on top.

Ken attributed growth to 30 years of in-house innovation, integration of 30 functions in FortiOS 8.0, and ASIC improvements. Competitors rely on acquisitions and remain fragmented.

Ken pointed to comparable growth rates during COVID (low 40s). Christiane cited consolidation, simplicity, and security posture as drivers beyond AI, but no explicit sustainability timeline.

Ken downplayed end-of-service as a growth driver, comparing it to not waiting for an old car to die before buying a new one. Cited SASE, SecOps, and OT as real drivers. John Whittle added the challenge is prioritizing among too many growth opportunities.

Ken attributed Q4 guidance conservatism to service revenue drag from prior-year negative product billings, noting the 29-month average service term creates a lag. Product revenue strength should drive service recovery toward end of 2026.

Ken described SASE as both expansion from existing base (90%+) and competitive displacement. Three differentiators: single OS integration, sovereign SASE for service providers, and proprietary global infrastructure.

Ken described the long-term target of routing 70% of SASE traffic through owned infrastructure for cost advantage, acknowledging near-term investment pressure but framing it as long-term beneficial for margins.

Christiane explained sales teams are hesitant to increase commitments amid macro uncertainty, leading to conservative guidance despite strong April close rates and linearity. Ken added tariff-related caution but no price increases planned.

Keith explained Q4 upside came from $5-10M deals exceeding expectations by $40-50M, while Q1 caution reflects tariff exposure in Latin America, Canada, and US federal.

Keith attributed Q1 caution to tariff uncertainty and multinational exposure rather than fundamental weakness, while Ken noted the shift toward ARR/RPO may defer some billings.

Cooper explained 90% of software is subscription with majority through renewal motion. Software attach at refresh is healthy but a small component of total software. FY26 slower growth reflects FY23's flat base in the 3-year renewal cycle, not weak expansion. FY27 expected to inflect with larger renewal base.

Francois cautioned against over-reading single-quarter regional mix, noting timing of shipments. All three secular trends (hybrid multi-cloud, threat landscape, AI) are global including U.S. EMEA has additional sovereignty catalyst driving outsized growth but U.S. AI trends remain strong.

Cooper reiterated FY23's flat software creates a math headwind in FY26's renewal base. FY27 will see reacceleration as FY24's stronger base comes up. SaaS transition headwind also ending. Term license business grew 18% in FY25, underlining healthy fundamentals beneath the cycle.

Cooper confirmed still early in refresh with over 50% on legacy platforms. Additionally, data center capacity expansion for AI readiness is an emerging non-cyclical growth vector with multi-year potential. Near-term growth clouded by security incident impact.

Francois noted AI revenue exists today across three vectors. Additionally, some hardware refresh is indirectly driven by AI readiness. AI gateway GA provides new purpose-built AI security solution with early traction.

Cooper explained renewals drive growth because the base compounds annually with expansion. New business adds to the renewal base but isn't the primary revenue growth driver. ASC 606 upfront recognition creates lumpiness.

Cooper acknowledged some hardware pull-in from pricing increases. For H2 software, same renewal base exists but too early to assume Q1's exceptional expansion rates will persist. Taking prudent approach given it's early in the year.

Cooper acknowledged ASC 606 creates lumpiness but emphasized the underlying driver is customers converging multiple solutions onto F5's platform. Expansion rates exceeding historical norms on large subscription renewals.

Jayshree explained qualification cycles have extended from 2-4 quarters to 6-8 quarters due to new product complexity, customer readiness, and manual cable installation timelines.

Jayshree pushed back on flat core business conclusion, noting it is too early in the year to specify segment growth precisely. Denied memory allocation prioritizing cloud over enterprise.

Jayshree attributed quarterly variability to supply-driven shipment timing rather than demand weakness, reiterating strong commitment to 20% growth.

Jayshree defended margins as efficiency-driven, not just pricing. Tomahawk 6 is in Arista's labs with new products expected next year. White box coexistence acknowledged.

Jayshree noted even if customers tried to pull in orders before July, Arista couldn't supply it all. No material inventory buildup at customer sites observed.

Chantelle cited coverage expansion, preferred partner programs, and new logo focus. Jayshree highlighted routing now includes dedicated hardware SKUs with 7280 platform.

Akash confirmed typical seasonality: Dec and Mar quarters strongest, June quarter lowest. Pattern consistent with historical handset business trends.

Akash broke down Q1: auto flat to slightly up from $1.1B record, IoT positioned for growth, handsets low teens sequential growth driven by Snapdragon 8 Elite Gen 5 launches.

Akash cited Xiaomi multi-year deal as evidence of strong China positioning. Cristiano added 30 years of China experience and expanding beyond phones into auto, industrial, robotics.

Akash confirmed ~30% margin target maintained. Growth in auto/IoT far exceeds Apple revenue scale, enabling continued margin management despite Apple decline.

Akash broke down 13% handset growth into content increase (sustainable multi-year trend) and premium tier volume growth (21% to 30% of market), both seen as durable.

Amon countered peer weakness with data points on China OEM growth and content increase, and said Qualcomm no longer sees the old inventory dynamics.